A federal judge last week ruled that Entergy’s Vermont Yankee nuclear power plant—Vermont’s only reactor—can remain operating beyond a state-mandated shutdown deadline. State laws that would force the closure of the 40-year-old plant, which recently garnered a 20-year operating license extension from the Nuclear Regulatory Commission (NRC), are preempted by federal law, the judge said.

Entergy had filed suit against Vermont Governor Peter Shumlin, Vermont Attorney General William Sorrell, and members of the Vermont Public Service Board in April 2011, arguing that three Vermont laws governing Vermont Yankee were grounded in nuclear safety concerns, and they were therefore invalid because they are preempted by the federal Atomic Energy Act.

U.S. District Judge Garvan Murtha issued a 102-page decision that agreed with Entergy last week. "This court holds there is overwhelming evidence in the legislative record that Act 160 [a Vermont law requiring legislative approval for the nuclear plant to operate and which contains a clause about environmental impacts of long term spent fuel waste storage] was grounded in radiological safety concerns and the concomitant desire to empower the Legislature to act on those concerns in deciding the question of Vermont Yankee’s continued operation," he wrote.

The Vermont Yankee Nuclear Plant began operating in 1972 under a 40-year operating license issued by the Atomic Energy Commission (the NRC’s predecessor) and after the Vermont Legislature voted to allow a nuclear plant to be built in the state. The plant’s current license was set to expire on March 21, 2012, but the NRC last March renewed it through March 21, 2032.

The plant sells power wholesale on the interstate market. Since 1972, about 55% of the power produced by Vermont Yankee has been consumed by Vermont (and represents about a third of the power consumed by that state); the remainder is sold to utilities in neighboring states.

In 2006, the state’s General Assembly passed a law that outlined the requirements for continued operation of a nuclear power plant in the state. Later, in 2010, the state Senate voted 26-4 to block the plant from operating past March 2012, when its state permit expired.

Entergy, which bought the plant from a group of New England utilities in 2002, protested, saying the 2006 law violated a key provision of a Memorandum of Understanding (MOU) signed by Vermont officials and other parties at the time of the plant’s purchase.

“Under that provision of the MOU, Entergy’s two subsidiaries had agreed to seek a certificate of public good from the Vermont Public Service Board if it sought to operate the plant beyond March 21, 2012,” the company said when it filed suit against the state last April. “This was in accordance with the process and standard for securing the state certificate in effect at that time. As its complaint alleged, Vermont repudiated the MOU, breaching that agreement and excusing the two Entergy subsidiaries’ obligation to further comply with that specific provision.”

The federal court last week remanded the case to the Vermont Public Service Board, whose three-member panel is expected to reopen its review on whether to grant the certificate of public good. Vermont Attorney General Sorrell, meanwhile, has 30 days to decide whether to appeal.

It is unclear how Vermont’s lawmakers will proceed. “I am very disappointed in today’s ruling from the federal court,” Gov. Shumlin said in a statement. “Entergy has not been a trustworthy partner with the state of Vermont. Vermont Yankee needed legislative approval 40 years ago. The plant received approval to operate until March, 2012. I continue to believe that it is in Vermont’s best interest to retire the plant. I will await the Attorney General’s review of the decision to comment further on whether the state will appeal."

Entergy hailed the decision as a victory. “We’re pleased with the decision, which Judge Murtha issued after a thorough review of the facts and the law,” the New Orleans–based corporation said in a statement. “The ruling is good news for our 600 employees, the environment and New England residents and industries that depend on clean, affordable, reliable power provided by Vermont Yankee.”

Sources: POWERnews, Entergy, U.S. District Court for the District of Vermont, Gov. Peter Shumlin